TRADING COURSE www.optionstradingiq.com © Copyright 2016. Options Trading IQ. All Rights reserved.

DISCLAIMER Any information contained in this presentation is for educational purposes only. Neither IQ Financial Services, LLC or Gavin McMaster are licensed financial advisors, registered investment advisors, or registered broker dealers. Neither do they provide investment advice, financial advice or make investment recommendations and they are not in the business of transacting trades. Nothing in this communication constitutes a solicitation, recommendation, promotion, endorsement or offer to buy or sell by IQ Financial Services, LLC or Gavin McMaster of any particular security, transaction or investment. Any trades and / or results covered in this presentation may or may not be live trades. All trades and trading results are believed to be accurately presented. However, since the trades may not have been executed in the market, the results may have been under or over compensated for the impact, if any, of certain market factors such as liquidity, slippage and commissions. Therefore there can be no guarantee of accuracy or completeness. No representation is being made that any portfolio will, or is likely to achieve profits or losses similar to those shown. The risk of loss in trading securities and options in particular can be substantial. Customers must consider all relevant risk factors, including their own personal financial circumstances, before making any financial transaction. Options involve risk and are not suitable for all investors. See the Options Disclosure Document: Characteristics and Risks of Standardized Options, available from www.optionstradingiq.com/risks © Copyright 2016. Options Trading IQ. All Rights reserved.

The Great Depression - 1929 1935 1942 1952 1954 1959 3 © Copyright 2016. Options Trading IQ. All Rights reserved. 3

OUTLINE 6 Strategies A Little Bit of Theory Guidelines TRADING PLANS Preparation This Week 4 © Copyright 2016. Options Trading IQ. All Rights reserved. 4

6 STRATEGIES Iron Condor Bearish Butterfly Iron Trapdoor Diagonal Spreads Weekly Butterfly Spreads The Wheel 5 © Copyright 2016. Options Trading IQ. All Rights reserved. 5

WHAT IS AN IRON CONDOR? *Please note that the prices and other statistics on the table below are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions 6 © Copyright 2016. Options Trading IQ. All Rights reserved. 6

PROBABILITY 7 © Copyright 2016. Options Trading IQ. All Rights reserved. 7

WHAT IS AN IRON CONDOR? 8 © Copyright 2016. Options Trading IQ. All Rights reserved. 8

WHY TRADE IRON CONDORS? Consistent Monthly Income High Probability Easy To Manage Avoids Overtrading Non-Directional Short Vega 9 © Copyright 2016. Options Trading IQ. All Rights reserved. 9

BEARISH BUTTERFLY Low Maintenance Allows You To Scale In Does Well In Most Markets 10 © Copyright 2016. Options Trading IQ. All Rights reserved. 10

INITIAL POSITION *Please note that the prices and other statistics on the table below are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions 11 © Copyright 2016. Options Trading IQ. All Rights reserved. 11

INITIAL PAYOFF GRAPH 12 © Copyright 2016. Options Trading IQ. All Rights reserved. 12

FULLY SCALED GRAPH 13 © Copyright 2016. Options Trading IQ. All Rights reserved. 13

IRON TRAPDOOR Reduced Vega Exposure Profit Zone on the Downside Lower Risk on the Upside Handles Fast Moving Markets Better Than IC 14 © Copyright 2016. Options Trading IQ. All Rights reserved. 14

IRON TRAPDOOR *Please note that the prices and other statistics on the table below are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions 15 © Copyright 2016. Options Trading IQ. All Rights reserved. 15

IRON TRAPDOOR 16 © Copyright 2016. Options Trading IQ. All Rights reserved. 16

DIAGONAL SPREADS Positive Vega Short-term Trade Can Use to Hedge Other Positions Ideal if Zero Cost or Slight Credit 17 © Copyright 2016. Options Trading IQ. All Rights reserved. 17

DIAGONAL SPREADS Entry Feb 20th Exit Feb 26th 18 *Please note that the prices and other statistics on the table below are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions 18 © Copyright 2016. Options Trading IQ. All Rights reserved. 18

DIAGONAL SPREADS 19 © Copyright 2016. Options Trading IQ. All Rights reserved. 19

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Weekly Butterflies Very Cheap Way to Gain Directional Exposure Potentially Large Payoff if Index Pins the Strike Can Trade Double or Single Butterflies Set and Forget Strategy Best to Enter Double Butterflies After 1-2 Week Chop 21 © Copyright 2016. Options Trading IQ. All Rights reserved. 21

November 14th Entry 22 © Copyright 2016. Options Trading IQ. All Rights reserved. 22

November 21st Settlement 23 © Copyright 2016. Options Trading IQ. All Rights reserved. 23

THE WHEEL STRATEGY Similar to Covered Call Strategy Longer Term Strategy With Monthly Income Buy Stocks For Less Need Strict Trading Rules 24 © Copyright 2016. Options Trading IQ. All Rights reserved. 24

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SELLING PUTS Sell a Put. In Other Words, You Are Short A Put You Have The Obligation To Buy At The Strike Price You Receive Premium 26 © Copyright 2016. Options Trading IQ. All Rights reserved. 26

WHY SELL PUTS Great Way To Get Long A Stock Purchase Stock For Less Than The Current Price If Stock Is Flat Or Rises, You Collect Premium Income Can Keep Collecting Premium Income 27 © Copyright 2016. Options Trading IQ. All Rights reserved. 27

TAKING OWNERSHIP If The Stock Falls Below The Strike Price, You Are Assigned on 100 Shares Now You Can Start Your Wheel Trade 28 © Copyright 2016. Options Trading IQ. All Rights reserved. 28

THE PROCESS Have To Be Willing To Own 200 Shares of The Stock Sell 1 Put. If the put expires worthless, revert to step 1 and sell another put. Once assigned on the short put, you hold 100 shares. If you are still bullish on the stock, write another put. At the same time you sell a covered call on the 100 shares. If the stock falls, the 2nd put is assigned, completing the investors’ total order of 200 shares. 29

THE PROCESS Now that you own 200 shares, sell 2 covered calls against those shares The chosen strike price and expiry month will be determined by the investors’ outlook on the stock Once the stock rises and the 200 shares are called away you can repeat the process 30 © Copyright 2016. Options Trading IQ. All Rights reserved. 30

BENEFITS OF THE WHEEL Put and call selling helps generate significant monthly income Shares can be purchased for less than their current price Option premium effectively reduces the average cost of the share purchase Dividends received from holding the shares will produce another source of income By adhering to a strict process, you can take some of the emotion out of your investment decision making 31

RISKS OF THE WHEEL Losses can mount up quickly if you do not have stop losses in place Traders should be wary not to be enticed by stocks that have high option premium. High option premiums mean the stock is more volatile This strategy should only be attempted on stocks you are willing to own 32 © Copyright 2016. Options Trading IQ. All Rights reserved. 32

2008 - 2009 Stocks Continuing To Fall End Up Selling Calls For Less Than Your Cost Basis Wheel Still Performed Better Than Outright Stock Ownership Need To Use A Stop Loss 33 © Copyright 2016. Options Trading IQ. All Rights reserved. 33

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GUIDELINES Allocations 35 © Copyright 2016. Options Trading IQ. All Rights reserved. 35

GUIDELINES Greeks 36 © Copyright 2016. Options Trading IQ. All Rights reserved. 36

TRADING PLANS 37 © Copyright 2016. Options Trading IQ. All Rights reserved. 37

PREPARATION Set Up Trading Log / Journal Paper trade – Min. 3-6 months 38 © Copyright 2016. Options Trading IQ. All Rights reserved. 38

THIS WEEK Opening Trades Trading Log 39 © Copyright 2016. Options Trading IQ. All Rights reserved. 39

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